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There’s Always More Money For Defence, Some Aspirational, Some Real, Apparently

Today the Opposition Leader revealed a broader outline of defence policy for an incoming Liberal National Party Coalition Government, some of it firm commitments, some of it aspirational. That’s the thing about administrations of the right side of the political spectrum, there’s always space in the budget, no matter how tight or how far in deficit the fiscal position is. It’s all about appealing to the need to feel secure, that we’re being looked after and protected by a strong government from nasties within and external to the country. Of course a firm level of defense is always required, but conservative governments like to go a bit further to say the least.

First, in terms of looking after those who have been in the Australian Defence Force, rather than in terms of security, the Coalition, after fairly prominent debate has decided it necessary to “properly” index military pensions. This would happen in the first year of an Abbott Government and, if based on the template of the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill, would cost about $1.7 billion over 4 years.

In terms of existing spending commitments, Mr Abbott today said in his speech to the RSL National Conference that within 18 months of taking government, the Coalition would look at a timetable for the acquisition of the troubled Joint Strike Fighter. This is not something to rush into and is a project area where other nations are being increasingly cautious.

One of the first defence capability purchases that the Coalition would make would be a fleet of unmanned aircraft. Mr Abbott said that these capabilities were necessary, especially to provide surveillance over business projects 0n the North West Shelf as well as searching for those pesky asylum seeker boats.

Despite the pledge to immediately purchase drones, Mr Abbott today announced that submarine capabilities are the “probably the most urgent big procurement decision” the government needs to make. These would replace the Collins Class fleet purchased under the Howard Government. Presumably the announcement of submarine construction, to be based in South Australia, means that the Coalition would continue, at least in part, with Labor’s $40 billion pledge to build 12 new submarines

To get a broader look at the needs of the ADF, again, the Coalition would, within 18 months of taking office, proceed with another defence white paper. That means just a year to 18 months after the 2013 defence white paper is released, there will be another one. Surely that one is likely to say exactly the same thing as the one released in 2013. Defence capabilities simply don’t change and evolve that fast, though security challenges can, but this is unlikely, especially with the winding down of the Afghan conflict and future challenges, a term used very loosely, like the rise of China and India firmly in mind.

Finally, there’s an aspiration to grow the defence spend by 3% yearly, once the budget is back in order, surplus, to keep on top of perceived defence materiel and other needs of the broader defence organisation.

So where’s the money coming from? Well, supposedly room will be made in the frontline capabilities budget by making changes, a purge of backroom bureaucrats. This might make some savings, but would in no way go anywhere close to the budgetary savings necessary to accommodate such significant and ongoing funds.

So what else would have to go from the federal budget? Health? Education spending? Maybe that big paid parental leave scheme the Coalition holds onto? Well, most of the priorities are aspirational, so perhaps these departments can take some solace, at least that defence spending might not result in a cull of their staff and programs.

The freed up spending from the planned return of combat troops from Afghanistan though will provide some not insignificant room in the budget of a future government. As a consequence, some of these aspirations might become a reality.

There’s always more money for defence, of course.

Budget Announcements and Half Announcements are Outdoing Possible Leaks

It is a regular feature of Australian politics that in the days and weeks leading up to the delivery of the budget by the Treasurer of the day budget leaks and rumour generally abound from the Australian political centre that is Canberra. This year however, announcements of budget items seem to have outdone the whisperings about possible spending allocations and cuts that followers of politics are used to leading up to that Tuesday in May when the Treasurer steps up to the despatch box to inform the country of their governments fiscal priorities.

There has been, for some days now a rumour abounding in Canberra and fuelled by the heightened interest of politicians in ensuring it does not occur, that the Gillard Government is set to announce cuts to the foreign aid budget.

This follows a promise by Labor, under former Prime Minister, now humble backbencher, Kevin Rudd that the Labor Government he once led, would increase foreign aid spending to a total of 0.5% of Gross National Income (GNI) by financial year 2015-16.

The belief around Canberra and the aid sector seems to be that the government are set to scrap their commitment to head toward spending on foreign aid of 0.5% of GNI.

The rumour mill surrounding this has almost exploded from being overworked and it would appear, with the strength of the political backlash to the simple report of this possible move that there has to be a real element of truth in it, without any real details having been leaked on the matter. So this item, almost alone in specific and credible rumours will be one to keep an ear out for confirmation of or otherwise from 7:30pm next Tuesday, May 8th.

But for this one real virulent rumour there have been more confirmations of and half announcements of both cuts and new spending to be allocated in what the Labor Government hopes will be a budget that returns to surplus in 2012-13.

Aged care is set to be overhauled in the 2012-13 budget to be delivered by Treasurer Wayne Swan on Tuesday. Back in April it was announced that the government would commence, on the 1st of July 2012 a ten year plan costing $3.7 billion to transform the way aged care is delivered, allowing more people to seek care in their own homes and making the cost of aged care homes easier to bear for the most financially vulnerable.

The Australian Government, via Prime Minister Julia Gillard on Monday at the NDIS rally in Sydney half announced that there would be an allocation of funds toward starting the National Disability Insurance Scheme a year earlier, commencing at 4 different launch sites from July next year.

But it was only a partial announcement from the PM, albeit a very welcome development for Australian’s with a serious and permanent disability and their families and carers. Prime Minister Gillard announced that next year these 4 launch sites would assist an initial 10,000 Australians with a disability and double the next year to provide help to another 10,000 people.

What this announcement lacked was detail, including most importantly, the estimated cost of the program rollout, but also what parts of Australia would be given the opportunity to be covered by the Medicare-like framework. The PM said we must wait until the budget for the details, a real tease, if not a hope building one in this important area of government policy.

In a budget where the expectations were for savage spending cuts, a new spending initiative is a very interesting element in the budgetary discussion which is ramping up five days from its announcement.

Today too, the government have announced $214 million toward the planning of 12 new submarines to replace the Collins Class fleet which had their troubles, particularly in the initial stages of development and operation.

Again though, for these not insignificant spending allocations, the Labor Party have also flagged ahead of May 8, areas where they will seek to slash or defer public spending.

The government today also announced in the area of defence spending that there will be both cuts and the deferral of spending in the area of purchasing defence materiel.

It was announced today that the planned requisition of self-propelled artillery will be scrapped altogether and this alone would save the budget bottom line a total of $250 million dollars.

The trouble-plagued delivery of the F35 Joint Strike Fighter (JSF) will be delayed two years from the previously expected date of receipt, moving our acquisition of this defence capability into line with that of the US. In doing this $1.6 billion will be saved from the budget from this measure by itself.

In announcing the cuts to defence spending, both the Prime Minister and the Minister for Defence, Stephen Smith assured Australia that defence cuts would not impinge on or include cuts to spending related to our operations in Afghanistan and elsewhere overseas.

The leaks and rumour mill have been almost non-existent over the budget-planning period and look set to remain minimal with only three full working days left before the final announcement of spending priorities occurs in Canberra. This could be put down to the poll woes that have faced the government for a prolonged period of time, trying to get some messages out early to cloud what is supposed to be a difficult budget, according to the warnings repeatedly given, no matter how unbelievable.

Nevertheless it has been an interesting exercise to observe the seemingly comparative lack of rumours as we hurtle toward the 2012-13 budget.

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